European leaders are locked in a fierce debate over how to solve the debt crisis that is killing off growth on the continent, including whether to ease up on the terms of Greece's bailout deal.
A European Union official says worsening economic conditions have made Greece's current bailout agreement an "illusion," but Germany is resisting any changes.
A narrow victory for the New Democracy party in elections over the weekend in Greece means that the country is more likely to stick to the harsh austerity terms of its $300 billion bailout packages and avoid a chaotic exit from the euro in the very near future -- an event many fear would destabilize Europe and send shock waves around the world. However, news of the election result has not given Europe the breathing space it needed to sort out its problems.
Greece's economy is still in a very vulnerable state. The country is in a fifth straight year of recession and could easily deteriorate to a point where a default and euro exit are inevitable. It is looking to renegotiate some of the harsh austerity terms and conditions of the rescue loans it relies on to pay its bills -- something that other European countries such as Germany are opposed to.
However, the EU official speaking in Brussels on Tuesday argued that the terms of Greece's bailout had to be renegotiated because the poor economy has left Greece behind in meeting its targets.
The official, who spoke on condition of anonymity, citing policy, said that the goals of the agreement would not be changed: They remain to reduce Greece's debt to a level that is sustainable and reform its economy to make it competitive.
Finance ministers from the 17 countries that use the euro meet Thursday in Luxembourg to discuss how best to solve the problem, which threatens to place ever greater burdens on national budgets and further destabilize the region's economies. Europe is a substantial trading partner with the rest of the world. If it falls into a deep recession sparked by a Greek exit of the euro or a massive bailout for Spain or Italy, orders for U.S. and Chinese goods are going to start falling off.